Shortly after approving the BitWise 10 crypto index fund -conversion, the US Securities and Exchange Commission paved the decision for a full committee assessment. So why does the SEC stop approvals?
Summary
- The ETF approval of BitWise was stopped only a few hours after the approval, so that the Multi-AST Crypto Fund in the Limbo regulations remains.
- The GDLC from Grayscale was confronted with a similar stay earlier this month, so that the company was warned that the delay could harm investors.
- The BITW Index Fund has a market-cap-weighted basket of ten leading crypto assets, led by Bitcoin and Ethereum.
On July 22, the SECs Division of Trading and Markets promised Accelerated approval for BitWise’s proposal to convert its freely available crypto-index fund into a spot-exchange-related fund.
The move would have enabled the fund to mention and trade NYSE Arca under changed rule 8,500 -e, which regulates trust units. The approval was seen as a milestone for Multi-AST Crypto ETFs in the US
Later on the same day, however, the sec office of the secretary issued A notification stating that the committee would revise the delegated action.
According to Rule 431 of the Commission’s practical rules, such an assessment results in an automatic stay. This means that the approval is suspended until the entire committee decides whether it should be maintained, change or destroy it.
What is the BitWise 10 Crypto Index ETF?
The BitWise 10 Crypto Index Fund, launched in 2017 and trade under the Ticker BITW, is designed to follow the performance of the ten largest crypto assets, excluding stablecoins and packaged tokens.
The Revalives Fund again in balance and from June 2025 it had almost 90% of its portfolio in Bitcoin and Ethereum. Other interests were XRP, Solana, Cardano, Chainlink, Avalanche, Litecoin and Polkadot.
The goal of Bitwise was to convert BITW from a freely available product into a regulated ETF, making broader access to investors and potential reimbursement reductions possible.
The approval would have permitted NYSE ARCA to state shares of the BitWise 10 crypto index ETF.
According to the order of the SEC, the fund met the most important conditions, including keeping at least 85% of its assets in digital raw materials that already serve as the primary possession of approved ETFs, such as Bitcoin and Ethereum.
The goal of Bitwise was to convert BITW from a freely available product into a regulated ETF, making broader access to investors and potential reimbursement reductions possible.
Why did SEC spend the residence order?
This is not the first time that the SEC has taken such action. On July 1, the commercial division of the committee and the markets approved Grayscale’s request to convert its Digital Larg Cap Fund (GDLC) into an ETF.
Only a day later the committee remained the decision using the same Rule 431 process. Just like BITW, GDLC has a mix of Bitcoin, Ethereum, XRP, Solana and Cardano.
The repeated use of rule 431 to stop approvals at personnel level has caused frustration with emptents, where Grayscale previously warned that the delay investors will damage. At the time the issuer said It may consider submitting a petition to force the supervisor to have his fund act as quickly as possible.
Bitwise has not yet commented on the last break.
According to experts such as Scott Johnsson from Van Buren Capital, the SEC may have planned the reversals in advance, possibly on the opposition of commissioner Caroline Crenshaw, who is generally known as a vocal crypto -skeptic.
On the other hand, Bloomberg Intelligence analyst James Seyffart speculated that the agency may hold because it takes a uniform framework for crypto ETFs.
“Perhaps the SECs way is to block these things to become ETFs before they come up with an ETF framework for digital assets. Aka A kind of generic list stand for what digital assets are allowed in an ETF -Wrapper and what criteria they will use,” Seyffart said in an X post that responded to Jhonsson.
Nate Geraci, co-founder of the ETF institute, has called The development a “bizarre situation” and has encouraged the regulator to “convert/prepare” the fund quickly “.
Sec delayed bitwise’s ethereum strike ETFs
The committee currently assesses an abundance of ETFs that follow the prices of different cryptocurrencies, but it has also demonstrated hesitation when it comes to more complex proposals, in particular those with regard to the use of mechanisms.
On 30 June, the SEC delayed his decision about Bitwise’s proposal to turn Ethereum into a spot ETF structure. Instead, the agency opened the application for public commentary and asked to request feedback about whether the preparation of rewards introduce risks that traditional ETFs are not equipped to manage.
